RSPI RespireRx Pharmaceuticals Inc (PK)

Item 1.01 Entry into a Material Definitive Agreement.

On December 29, 2017, RespireRx Pharmaceuticals Inc. (the “Company”) entered into a Common Stock and Warrant Purchase Agreement for $95,000, which was the last closing under its private placement of up to $1.15 million (the “Private Placement”) that commenced with an initial closing for $75,000 on August 29, 2017 and expired on its terms on December 30, 2017. The Company filed a Current Report on Form 8-K in connection with the initial closing on August 30, 2017. In connection with the Private Placement, the Company entered into Common Stock and Warrant Purchase Agreements (each a “Purchase Agreement”) with accredited investors (each, a “Purchaser” and collectively, the “Purchasers”), pursuant to which, the Company sold units for aggregate cash consideration of $404,500 (including $75,000 in the initial closing), with each unit consisting of (i) one share of the Company’s Common Stock, par value $0.001 per share (“Common Stock”), and (ii) one Warrant to purchase an additional share of Common Stock (each a “Warrant” and collectively, the “Warrants”).

The number of Shares and Warrants that have been sold in the Private Placement since its inception are shown in the chart below.

The price per unit in the each closing under the Private Placement was $1.00 (the “Per Unit Price”). The Warrants are exercisable until 5:00 p.m. on September 29, 2022 and may be exercised at 110% of the Per Unit Price, or $1.10 per share of Common Stock. The Warrants have a cashless exercise provision and certain “blocker” provisions limiting the percentage of shares of Common Stock of the Company that the purchaser can hold upon exercise. The Warrants are also subject to a call by the Company at $0.001 per share upon ten (10) days written notice if the Company’s Common Stock closes at 250% or more of the Per Unit Price for any five (5) consecutive trading days. The Purchasers were non-affiliated investors. In total, 404,500 shares of Common Stock were purchased for cash in the closings under the Private Placement, together with Warrants to purchase an additional 404,500 shares of Common Stock.

Of the maximum amount available in the Private Placement, up to $642,000 of units were available be obtained by stockholders who had purchased units in previous unit offerings in December 2016 and March 2017 pursuant to which they had received the right to exchange into subsequent offerings, similar to the rights granted in this Private Placement that are described below. As of December 30, 2017, all of those shareholders had exercised their exchange rights. The Company did not receive any proceeds with respect to units issued upon the exercise of these rights. As of December 30, 2017, 371,716 incremental new shares were issued in connection with the exercise of such rights. In addition, 270,284 warrants originally purchased in the prior unit offerings in December 2016 and March 2017 were cancelled and 642,000 new warrants were issued in connection with these exchanges. The new warrants are substantially similar to the cancelled warrants.

In addition, as set forth in the Purchase Agreement, each Purchaser had an unlimited number of exchange rights, which were options and not obligations, to exchange such Purchaser’s entire investment (but not less than the entire investment) into one or more subsequent equity financings (consisting solely of convertible preferred stock or common stock or units containing preferred stock or common stock and warrants exercisable only into preferred stock or common stock) that would be considered as “permanent equity” under United States Generally Accepted Accounting Principles and the rules and regulations of the United States Securities and Exchange Commission, and therefore classified as stockholders’ equity, and excluding any form of debt or convertible debt (each such financing a “Subsequent Equity Financing”). These exchange rights were effective until the earlier of: (i) the completion of any number of Subsequent Equity Financings that aggregate at least $15 million of gross proceeds, or (ii) December 30, 2017. Accordingly, as of the termination of the Private Placement, these exchange rights have also terminated.

In the case of an Acquisition (as defined in the Purchase Agreement) in which the Company is not the surviving entity, the holder of each Warrant would receive from any surviving entity or successor to the Company, in exchange for such Warrant, a new warrant from the surviving entity or successor to the Company, substantially in the form of the existing Warrant and with an exercise price adjusted to reflect the nearest equivalent exercise price of common stock (or other applicable equity interest) of the surviving entity that would reflect the economic value of the Warrant, but in the surviving entity.

Unlimited piggy-back registration rights have been granted with respect to the Common Stock, and the Common Stock underlying the Warrants, unless such Common Stock is eligible to be sold without volume limits under an exemption from registration under any rule or regulation of the SEC that permits the holder to sell securities of the Company to the public without registration.

The shares of Common Stock and Warrants were offered and sold without registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as provided in Rule 506(b) of Regulation D promulgated thereunder. None of the shares of Common Stock issued as part of the units, the Warrants, the Common Stock issuable upon exercise of the Warrants or any warrants issued to a qualified referral source have been registered under the Securities Act or any other applicable securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act.

This description of the Purchase Agreement, including the form of Warrant, does not purport to be complete and is qualified in its entirety by reference to the form of Purchase Agreement (including (i) the schedules thereto, and (ii) the Form of Warrant attached as Exhibit A thereto), which is included as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.